Alberto Montagner, Gregor Jost and Jonathan Green* say there is an imminent opportunity to transfer performance leaps and lessons learned from “survival minimum” to a new “strategic optimum” rather than returning to the previous ways of working.
Despite the salient pain-points brought about by our current crisis, many organisations – in their shift to “survival minimum” mode in recent weeks – have experienced significant leaps in speed, flexibility, and resilience in their ways of working.
One grocery retailer, for example, launched a curbside pick-up and delivery business in two days – a far cry from its legacy plan of 18-months.
Upon reflection, the group’s CEO had a bold and challenging message: “We adopted new technology overnight, not the usual years it takes.
How can we ever tell ourselves again that we can’t be faster when we’ve proven that we can?”
Similarly, a consumer goods manufacturer ceased its normal activities and retooled its production machinery to make personal protective equipment to defend against COVID-19, selling its non-medical grade masks online.
Again, this transformation took days not weeks, months, or years.
A manufacturer, providing yet another example, maintained 80-100 per cent capacity production levels while reducing its resourcing to a minimum with only 25-50 per cent of employees present.
As historian Yuval Noah Harari put it: “That is the nature of emergencies. They fast-forward historical processes. Decisions that in normal times could take years of deliberation are passed in a matter of hours.”
Many companies are now starting to think about the “next normal.”
There is an imminent opportunity to transfer these performance leaps and lessons learned from “survival minimum” to a new “strategic optimum” rather than returning to the legacy organisation and ways of working.
Emerging from the crisis – what can we keep
In the words of one executive, the COVID-19 crisis triggered organisations to adopt “five years of innovation in five weeks.”
What we have observed in many organisations during the crisis, and what could constitute building blocks of the new “strategic optimum” includes the following:
- Rapid decision making
Organisational leaders experience “making decisions in an afternoon that used to take us three months to make.” - Flatter, faster organisations
Crisis response and remote working triggered a virtual delayering by having communication flows and business processes jump across several layers of hierarchy, e.g., connecting the corporate center directly with the front line. - Small, agile teams
Organisations have started to more broadly institutionalize the ability to launch and dissolve small, agile teams for swift issue resolution and opportunity capture. - Dynamic resource reallocation
Companies are developing the ability to reallocate talent dynamically through connecting critical talent to value and through broader workforce redistribution. - Network robustness
The crisis has pressure-tested and strengthened relationships with the most important customers, vendors, regulators, community leaders, etc. - Leadership and talent readiness
Organisations have strengthened its leadership-in-crisis capabilities and are building out its talent bench through creating critical skills duplication and reinvigorating succession planning.
If these are indeed the building blocks to keep for a new “strategic optimum” operating model, the challenge (and opportunity to win the upturn) will be to institutionalise these new behaviours and habits, either through select, targeted interventions or through broader operating model transformation.
*Alberto Montagner, Gregor Jost and Jonathan Green are writers at McKinsey.
This article first appeared at mckinsey.com
